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Page Overview: BMW Group - Responsibility - Interviews

Talking to sustainability experts

Talking to experts.

Sustainability is a complex issue. Many aspects play a role in how and where sustainability is successfully implemented. Experts from different fields talk about where the BMW Group stands currently: What are the challenges we face? What new solutions are there?

Dr. Carl Friedrich Eckhardt

Interview.

In cities, something’s got to change.

Carl Friedrich Eckhardt

Head of Centre of Competence for Urban Mobility.

Up until now, BMW has sold cars, with combustion engines, in nearly all sizes and variations. But, in cities, the Munich car maker is pursuing a completely different vision: of less congestion, adequate parking – and much better quality of life.

“In cities, something’s got to change.“

Up until now, BMW has sold cars, with combustion engines, in nearly all sizes and variations. But, in cities, the Munich car maker is pursuing a completely different vision: of less congestion, adequate parking – and much better quality of life.

Traffic jams, lack of parking and nitrogen oxide figures that are much too high – the situation is serious. This has been recognised not only by the cities themselves, but also by the Bavarian auto manufacturer, the BMW Group. With options such as car-sharing, electro-mobility and parking apps, the Munich-based company has charted much new territory in its efforts to ensure customers can continue to enjoy “Sheer Driving Pleasure” in the future. For Carl Friedrich Eckhardt from the Centre of Competence for Urban Mobility, this is not a contradiction in terms, but a logical consequence. The BMW manager is sure: “If we can improve mobility and quality of life in cities, everyone will benefit.”

We talked to Carl Friedrich Eckhardt about the need for alternative mobility concepts, new customer segments, intelligent parking-space management – and a snowball effect that could change cities very quickly.

Mr Eckhardt, with the Centre of Competence for Urban Mobility, you are not only trying to improve individual mobility in our cities, but also quality of life. That’s pretty ambitious!

Carl Friedrich Eckhardt: I realise that may sound like a contradiction – but it isn’t. We just have to use public space more efficiently and more sustainably.
    

Up to a billion people will move to cities over the coming years. There’s not going to be a lot of public space left, surely?

That is why we have to ensure people can still get conveniently from A to B – not just by making traffic systems more efficient, but also by making better use of limited public spaces. We have a strong interest in this as a car maker. There are plenty of solutions already, but every city faces its own challenges and every city-dweller has different priorities. So we talk to them because we want to understand their needs.    

We are working with cities to find solutions that benefit everyone.

In the past, cars were always the problem – and now it’s a car company, BMW, that comes along with a solution. What do the cities say about that?

They were a little cautious in the beginning. In the meantime, they are realising that better quality of life and improved mobility can actually be achieved together. If we pull together to develop joint solutions, we can create a win-win situation for both sides.    

A lot of big cities seem quite open to the idea of alternative mobility services. Car-sharing has become a popular trend.

That’s right. There are 1.3 million registered car-sharing customers in Germany alone – and BMW is a big part of that, with more than 600,000 registered DriveNow customers. The exciting thing for us is that this not only gives us access to the car-sharing market, but also brings BMW into contact with entirely new customer groups. At the same time, car-sharing is the ideal instrument for cities to reduce traffic. Scientific studies have shown that a car-sharing vehicle replaces at least three private passenger cars. As conditions improve, I would even expect that ratio to increase to 1:10.    

30,000 car-sharing vehicles could replace 300,000 private cars.

What does that mean for a city like Munich exactly?

It’s quite simple: Let’s say we had a car-sharing fleet of 30,000 vehicles in Munich – and that is our vision – then they could replace up to 300,000 private cars. Now, if that fleet were also electric, it would be a big improvement on today – both in terms of quality of life and emissions. The spaces this frees up could then be used for park benches, grassy areas, flowerbeds, cafés, car-sharing parking… 

Carl Friedrich Eckhardt

That’s a nice idea, but how do you get from here to there? You can hardly take people’s cars away.

There’s a lot of discussion about this currently in a number of cities that are thinking about banning diesel vehicles. In the interests of the people living there, I believe a restrictive measure like that should always be the last resort. It is also very difficult to implement from a political perspective. We don’t want to take anything away from anybody. Everyone who wants to keep their car should be able to do so. But those who choose to use car-sharing or an electric vehicle shouldn’t feel like they are giving anything up – it should enhance their experience.    

That assumes that car-sharing is available everywhere…

...and connected to a well-functioning public-transport network. Car-sharers tend to like multi-mobility – which means using our services in conjunction with local public transport and bikes. The average DriveNow customer only drives once or twice a month, so it also reduces traffic on the roads. That makes car-sharing part of the solution, not part of the problem. For this reason, we will be increasing availability of car-sharing vehicles in inner cities – because, with public transport and cycling options, that is where conditions are best for mobility without car ownership.    

For me, parking spaces are the best incentive.

That still doesn’t solve the problem of finding a parking space when I go out for the evening - even if I am car-sharing.

That’s why, for me, parking spaces are the most effective incentive system there is. However, we still have to convince some people of this – effective, fair parking management is a very sensitive issue.    

So, the challenge is to create parking privileges for car-sharing?

We are working towards this in many cities, trying to pave the way for people who don’t drive very often to enjoy mobility without their own car. Cities can then use the spaces this frees up to create privileged parking for car-sharing and electro-mobility, or for other purposes. This should be the decision of the people who live there. If we get things rolling in this direction, I’m sure we’ll soon see a snowball effect.    

We’re not looking for a big bang – more of a smooth transition.

What makes you so sure?

Think about your friends and acquaintances. How many of them who live in the city just have a car because they need one every now and again? These are exactly the people we are trying to reach. We’re not looking for a big bang – more of a smooth transition from the current status quo to a new urban mobility. The key will be for those who want to drive their own car to be able to do so without any disadvantages. Car-owners will benefit over the medium term – as will cities that lower their nitrogen oxide figures.    

And everybody’s happy?

As long as we can organise the limited parking in the cities so that everyone can use it, yes. That will include varying parking charges according to the time of day, length of parking or emissions levels, instead of just charging a flat rate. And if the people living in a certain part of town get to decide not only what to do with the space this opens up, but also how parking fees are spent – then the lack of parking can be used for good. That will also help generate political support.    

We want to manage parking so that it works for everybody.

Dr. Carl Friedrich Eckhardt

Depending on the price, that could cause some pain…

Of course, people will pay more – but that’s no different than with other goods that are in short supply. Just think about how much it costs to live in downtown Munich! We’re not trying to fleece anybody; we just want to organise parking in big cities differently – and perhaps more fairly. What is wrong with using privileged parking or lower fees as incentives for combustion engines with lower emissions or electric vehicles, for example? 

Parking privileges for electric vehicles could be quite an explosive issue. What if the limited parking available is not even used?

It shouldn’t be too difficult to prevent that. Parking privileges don’t have to be just for private electric vehicles. E-car-sharing, for example, would easily create basic demand. Not to mention the fact that 75 per cent of users don’t have the ability to charge their vehicle at home: They rely on public charging points – which would ensure additional usage of privileged parking spaces.        

Who’s going to pay for all this?

On the one hand, the Federal Government, which is launching a package of measures to expand charging infrastructure; on the other, private investors. This is where the municipalities come in. By ensuring a basic level of charging point utilisation through parking management, with privileges for electric vehicles, they can create ideal conditions for investors. That way, the municipalities themselves don’t have to invest as much.        

Your hire car will soon smell like your own.

You are clearly reaching flexible, young city hipsters with car-sharing and electro-mobility. But what about the others? People who go out to work? Those who want to drive their own car?

It may have started out with cool young city types, but we are now reaching nearly all layers of society. And we are continuing to refine our offering. Pretty soon, you won’t notice whether you are driving a hire car or your own. As soon as you get in, the car will adjust your seat, select your favourite music and even smell like yours. Parking will be easier, too. We just developed an app that will significantly reduce traffic looking for parking spaces.    

An app that can find me a parking space?

Yes, almost! The app is called ParkNow. It’s been available in Germany since March 2016. At the moment, it gives you an overview of the fee structure of the parking zones. It is not yet possible to see the current parking space situation. But it could be in the future. After all, you would think twice before getting into your car and driving off, if you already know in advance that there are no parking spaces available. You can even pay for free parking spaces directly using your smartphone app.    

A lot of this is new territory for BMW. This must be causing quite a bit of discussion within the company?

Yes, of course. But the great thing about BMW is that we never stand still – we are always looking ahead to tomorrow’s challenges. When it comes to urban mobility, we need to change things – and there are really only two possibilities: Either we stay out of it, or we tackle the issue head-on and tap into a wealth of additional business potential. Demands change. We used to be a company that sold cars. Today, we sell cars and services. In the future, we will perhaps be a company that simply sells mobility.

 

Stand: July 2016

Interview.

A second life as a storage buffer.

Julian Weber

Head of Innovation Projects E-Mobility.

Every BMW i3 has a valuable core: The lithium-ion battery inside enables the little electric car to zip quietly through the city without CO2 emissions. But the battery also has a second, just as sustainable, life as a storage buffer for renewable energies.

"A second life as a storage buffer."

Every BMW i3 has a valuable core: The lithium-ion battery inside enables the little electric car to zip quietly through the city without CO2 emissions. But the battery also has a second, just as sustainable, life as a storage buffer for renewable energies.

In the BMW i3, BMW development engineers have created an environmentally-friendly city car that could soon be performing totally different tasks. The BMW i3’s lithium-ion battery is not only 100 per cent emission-free, but can also be used to buffer solar and wind power. The experts in Munich are excited about how flexible and versatile the small battery is – and they have quite a few ideas about how it can play a part in the energy revolution.

But how does it all fit together? We talked to Julian Weber, the man in charge of e-mobility innovation projects at BMW, about genuinely sustainable city vehicles, the challenges of renewable energy and a remarkably versatile lithium-ion battery.

BMW i3s have only just been launched – and you are already thinking about what you can do with the old batteries?

Julian Weber: We designed the BMW i3 to be sustainable throughout the value chain, so it makes sense to do something with the batteries at the end of their vehicle life.

Couldn’t you just recycle the batteries?

Yes, we could – 100 per cent, in fact. But it would still be too early. When we get them back after seven or eight years, those lithium-ions batteries still have many years ahead of them as extremely efficient stationary storage buffers for renewable energies. This means they can still make a valuable contribution to the energy revolution, for example, in their “second life”.

How?

To be able to use renewable energies like solar or wind power efficiently, you need storage buffers to balance out power fluctuations. There have been major technological advances in this area in recent years. At the same time, the price of solar energy has dropped dramatically. The same thing is happening now with batteries. The two technologies make a great combination. Using renewable energies to power CO2-free electric cars is just the beginning.

BMW i3 owners will soon be able to upgrade their batteries.

That sounds very optimistic. But you don’t have the batteries yet – and it will be a while before the first i3s come back.

We won’t have to wait much longer for the first batch, because the next generation of more powerful batteries with an everyday range of 200 kilometres will come onto the market in the summer. At the same time, many BMW i3 owners will be swapping their older battery for the new one.

And they’re as good as new?

They still possess nearly all their initial capacity – the technology isn’t old, just outdated, because there’s something newer.

Julian Weber

So you then modify these batteries?

We hardly have to change anything. In actual fact, the design of the vehicle battery has turned out great for stationary use: The batteries can be stacked on top of each other, for instance, to buffer larger quantities of energy as needed.

Does BMW make batteries?

We only buy in the battery cells. The rest of the battery – from battery control to temperature control – we design ourselves. I mentioned the next generation of batteries. The cells are central to this and development in this area is advancing very quickly: The next cells released onto the market will have a capacity of 33 kWh, instead of 22 kWh previously. The cells are also the reason why the BMW i3’s everyday range will soon be extended to 200 kilometres.

I firmly believe that electro-mobility will become a mass market.

But sales of the BMW i3 got off to a slow start, so the number of batteries we’re talking about can’t be that great…

We see electro-mobility as a future mass market, which will benefit the environment and enhance urban quality of life. I think the BMW i3 has already had a major impact. It proves that electro-mobility can be fun. Alongside the geeks and customers committed to sustainability, we are seeing more and more people who just love the performance and convenience of the BMW i3.

But the BMW i3 isn’t the only electric car out there. Other manufacturers also seem to be doing a lot of things right – especially when it comes to range.

We designed the BMW i3 from the ground up as a sustainable electric vehicle for the city. The decisive factor was finding the ideal ratio between battery size and range. Producing batteries generates CO2 emissions. So, an electric vehicle with a larger battery already starts out with a much higher CO2 balance. Large electric vehicles are based on a totally different concept. They just want to prove that it’s possible to drive 500 kilometres on electric power. But that’s not sustainable. We are not interested in competing on that level with the BMW i3.

Longer range without a bigger battery.

But you also want to give the i3 a much longer range with the next battery generation.

We want to achieve a longer range without a bigger battery! If we can use better cells to build a battery with the same weight, size and carbon footprint, we will certainly do so.

Batteries will get better and cheaper – of course. But how can I charge my BMW i3 100-per-cent CO2-free? At conventional charging stations, for now, I still only get the usual EU energy mix.

What we are talking about here is the interface between e-mobility and renewable energy usage. We combined both technologies in the parking garage of our Research and Innovation Centre in Munich: The carpark is equipped with photovoltaic systems and ten charging stations for our staff’s electric cars. How much of that charging current comes from photovoltaics? Usually about 30 per cent.

Julian Weber

Because the sun isn’t always shining?

That’s right. So we installed four BMW i3 batteries as a storage buffer – and, lo and behold, the percentage of solar energy in the charging current immediately soared to 60 per cent. That is a huge success!

Right – because you can balance out short-term fluctuations in the electricity network.

That’s one aspect. But the batteries can do much more than that. In a pilot project in the Hamburg HafenCity district, for example, we installed eight BMW i3 batteries to balance out fluctuations in the power network and, at the same time, supply two rapid-charging stations. This provides a maximum balancing power of 50 kilowatts and an electric charging capacity of 20 kilowatts at the vehicle charging point. The batteries can either be supplied with locally-installed photovoltaic energy or charged slowly at times when the load on the grid is lower – for example, at night – to be able to release energy very rapidly when needed.

Charging infrastructure will help electro-mobility break through.

So does that mean you’ll soon be offering your customers the BMW i3 as a package with charging station and storage buffer?

We could equip companies who already have a photovoltaic installation on the roof and want to acquire a fleet of BMW i3s with charging stations and storage buffers. On top of that, we also provide tips on how customers can lower their energy consumption. We have learned a great deal about energy efficiency. At our 30 production sites worldwide, we have already reduced energy consumption by almost 50 per cent in some cases.

If you stack them and link them together, does that mean the batteries can even be used for storing balancing energy?

We are currently building the world’s largest “battery second-life electricity storage unit” for use in the area served by energy supplier Vattenfall. The system will deploy used BMW vehicle batteries to stabilise the network in a secondary application with almost three megawatt hours of balancing power. However, they could also be used as storage for housing estates – or even as small storage units for individual homes.

Julian Weber

So, if I have a house and an electric car, how many car batteries would I need?

As a rule, a single family home in Germany uses about five kilowatt hours per year. A BMW i3 battery currently has a capacity of 22 kilowatt hours. That means a single i3 battery provides enough power for a house and a local charging station for half a vehicle charge. You can optimise this balance even further through intelligent system management.

What are the alternatives to batteries?

Pumped-storage plants. We recently spoke to the Mayor of New York. He said that our battery storage units would be a good solution for his city. You can hardly build a pumped-storage plant in Central Park. But a container full of batteries in each block of houses wouldn’t bother anyone. It’s the same in Germany.

"Vehicle to grid” – mobile energy storage on four wheels.

That sounds great, but wouldn’t every house have to have solar panels on its roof or a wind-power plant just around the corner.

That’s not necessary. The batteries can be used as mobile storage units during their first life, while still in the car. So, if I have 1,000 electric cars, I can assume that at least 20 cars will be fully charged at any one time. I could then take ten per cent of the stored energy from any of these: 20 cars multiplied by two kilowatt hours would provide a buffer of 40 kilowatt hours. If I know where the cars are parked, I could use those energy reserves.

Julian Weber

All of this opens up totally new business opportunities for BMW. But what happens if future road driving is hydrogen-powered, not battery-powered?

You need a battery for that, too. We firmly believe there will be parallel markets for both technologies: battery-powered for shorter distances and hydrogen for longer trips. There will still be plenty of business for batteries.

 

 

 

Update: May 2016

Ferdinand Geckeler

Interview.

We rely on insight – and competition.

Ferdinand Geckeler

Responsible for the sustainability program in the division purchasing and supplier network.

It is no easy task convincing more than 13,000 suppliers of the need for social and environmental standards – especially when they are located all over the world. But this is precisely where the BMW Group sees its duty.

“We rely on insight – and competition.”

It is no easy task convincing more than 13,000 suppliers of the need for social and environmental standards – especially when they are located all over the world. But this is precisely where the BMW Group sees its duty.

The supply chains of international automobile manufacturers like the BMW Group are generally long, dynamic and low on transparency. To maintain a clear overview and avoid the risk of environmental pollution or even human-rights violations, BMW in Munich has come up with a sophisticated system that not only ensures greater transparency throughout the supply chain, but also encourages competition – in the interests of sustainability.

We talked to Ferdinand Geckeler, who is in charge of BMW’s sustainability programme for purchasing and suppliers, about honesty among suppliers, combining quality with a willingness to embrace change – and the incentive of being the most sustainable of sustainable suppliers.

The BMW Group has more than 13,000 active suppliers in 70 countries worldwide, not counting subcontractors. That’s a big job!

Ferdinand Geckeler: At the BMW Group, we have integrated sustainability throughout our value chain. So, it makes sense that our suppliers should also be “clean” and comply with the same environmental and social standards we set ourselves. At the end of the day, they are responsible for a large share of value creation.

How does this work?

It is relatively simple – we make sure our suppliers know how serious we are about sustainability before a contract is awarded. Any company that wants to work for the BMW Group first has to fill out a sustainability questionnaire on its environmental, social and governance standards. We want to know exactly which environmental certificates they hold, for example, and whether they comply with the ban on child labour.

So all the cards have to be on the table from the start?

That’s right. Suppliers understand that and know what the process entails. In 2015, we used the questionnaire method to check out more than 2,300 potential supplier locations and evaluated them on the basis of their voluntary disclosures. The traffic light system we developed tells the supplier how they performed against our sustainability standards. It’s an incentive for them – and gives us more transparency along the value chain.

You clearly place a lot of trust in your suppliers. How do you know they are telling the truth?

You can tell. We don’t just ask questions; we also formulate clear expectations they have to fulfil if they want to enter into discussions with us. This generally means that we quickly establish contact with the top management, since they want to know exactly what we need. We have two to three top supplier managers visit us in Munich every week to learn more about our sustainability requirements and the BMW Group strategy. That signals to me that they are serious and willing to embrace change.

Voluntary disclosure comes before any order.

Ferdinand Geckeler

What are your minimum requirements?

We have defined minimum BMW Group social and environmental standards, which can be demonstrated by appropriate environmental certificates. The same standards apply to all our parts suppliers worldwide.

But there are countries that, shall we say, display a certain creativity in forging certificates and such documents. How do you protect yourselves against that?

We are well aware of this. These days, it is possible to verify a certification with a quick call to the inspection authorities. Our external service providers are also native speakers with a clear understanding of what the documents contain.

We give our suppliers time to qualify.

So, you’re well protected?

Yes, but we’re not trying to catch people doing something wrong to stay Above reproach ourselves. Our aim is to raise awareness among our suppliers so that we can optimise risks together at local level.

In other words, you make your suppliers your allies?

More like partners we work with to find solutions. So, if a company fails to qualify because they haven’t obtained certification yet – perhaps because sustainability hasn’t been a focus until now – we explain our position and help them qualify. BMW isn’t out to change world, but we do want to encourage suppliers to evolve.

How much time do you give suppliers for corrective action?

Once the order has been awarded, we generally give them between a year and a year and a half to achieve qualification and gain the necessary capabilities. However, this has to be before start of production, at the latest.

Ferdinand Geckeler

And what happens if violations do occur in the supply chain?

Then our risk management team immediately convenes to investigate the case – using the questionnaires as a basis for information. If the suspicion is confirmed and the supplier is uncooperative, we may decide to terminate the business relationship. But before it gets to that stage, we try everything to address misconduct or enable the supplier.

Violations may result in termination of the business relationship.

The BMW Group is putting a lot of effort into this area. Is it worth it?

People want to know where the products they buy come from – whether they are cars, textiles or food items. These days, it doesn’t take long for the press to pick up on environmental pollution or poor working conditions. The consequences for the companies involved are often devastating. Another aspect is that clean supply chains are an increasingly important factor in obtaining bank loans.

So sustainability standards in the supply chain are no longer just “nice to have”?

Absolutely not. That is why the BMW Group includes its supply chain in its Sustainable Value Report. Since 2013, we have also introduced credible testing processes for more than 80 per cent of our procurement volume. We owe it to our customers, because a sustainable supply chain also benefits product quality.

How?

Well-qualified, well-paid employees are happier and more motivated – and that has a positive impact on the quality of the parts delivered. Sustainable firms actually tend to cope better with change than others. We see that time and again.

Smart entrepreneurs are quick to recognise the competitive advantages.

It can’t always be easy to persuade Chinese or Indian businesspeople that they need to invest in the latest resource-efficient machinery?

Resource-efficiency is always a cost issue as well. That may not be quite as important in countries such as China, where energy is cheap and old equipment still does its job. But modern systems also offer the potential to produce more units and pay for themselves within a relatively short time – and that is something any smart entrepreneur is quick to recognise.

Ferdinand Geckeler

Really?

We even have the figures to prove it. Nearly 100 of our suppliers now report their environmental data to the Carbon Disclosure Project (CDP) as part of its Supply Chain Programme. These 100 suppliers invested 60 million euros in increasing efficiency and lowering CO2 emissions in 2015 alone. We see that in an extremely positive light.

What is the CDP?

The CDP (Carbon Disclosure Project) is a non-profit organisation founded in 2000. Today, it has more than 722 institutional investors and manages the largest database of its kind worldwide, ensuring a whole different level of transparency – also for competition between participating companies. The BMW Group has set itself the goal of handling direct purchasing volumes mainly through CDP reporting by its suppliers by the end of 2016.

Transparency means that everyone can measure themselves against everyone else.

Many BMW suppliers are big European companies like Bosch or Continental. Where are the benefits for small local firms?

When we build a new BMW plant anywhere around the world, we ask our parts suppliers to build new production locations within a radius of 100 kilometres. That makes things easier for us, because we can agree the standards we need with the European headquarters. But the suppliers then qualify local employees for their operations and offer people there the working conditions we guarantee. We also obtain all the services we need almost exclusively from local suppliers – from facility management providers to PR agencies to photographers and many others. The same award criteria apply to these firms as to all other suppliers.

You are in regular dialogue with suppliers – but what about subcontractors? A supply chain can be quite complex...

That’s right – and the farther you get from the direct supplier relationship, the harder it gets. Sometimes, when we complain to a subcontractor about a faulty part, they don’t even know who we are. It often turns out that they deliver to our supplier’s supplier. And the other thing is that many supply chains are very dynamic – meaning that conditions can change or new partners emerge. That doesn’t necessarily make things any more transparent.

We have created completely new supply chains for the BMW i3.

Where do you start?

In many different areas. First of all, we require our direct suppliers to ensure that all their subcontractors meet our sustainability requirements. But, of course, our suppliers cannot always guarantee that their subcontractors comply with our social standards in all countries. They are honest about it – but this is a problem we need to solve together.

Ferdinand Geckeler

For the BMW i3, for example, the BMW Group also developed totally new processes and materials…

For the BMW i3 supply chain three years ago, we formulated our sustainability standards for the first time with the consistency we apply today. It was, so to speak, our pilot project for establishing totally new materials in the market. As a result, back in 2013, the BMW Group became the first automobile manufacturer to use eucalyptus wood exclusively from certified forestry for the interior of the BMW i3.

You also used a leather in the BMW i3 that was tanned using olive leaves…

to avoid environmentally-harmful chemical processes. Exactly! We created a completely new supply chain for this. It is very different to just changing the colour of the leather and being able to choose between ten different suppliers. For a start, we had to find a tanner who could work with the olive leaf extract. In the meantime, other companies and tanners are also interested in the process.

Our demands have increased dramatically in recent years.

Wood and leather are used in relatively small quantities, but it will surely be harder to find solutions for extraction of critical raw materials like steel and aluminium.

The BMW Group  a relatively small automobile manufacturer by global standards, so we only have a limited influence on clean production and processing of these materials. But, even here, we do everything we can: We talk to international organisations and participate in cross-sector initiatives, such as the Aluminium Stewardship Initiative. Its members include one of the largest mine operators worldwide in an effort to ensure sustainable production of aluminium. The aim is to have certified, CO2-neutral aluminium on the market within three to five years.

So, since the BMW i3 came onto the market, a lot has happened in the BMW Group supply chain?

We are now applying what we learned with the BMW i3 across the board. This means we are checking the sustainability standards of every single new parts supplier – regardless of whether the order is for the BMW 3 Series, 5 Series or 7 Series. Every year, we are involving more and more suppliers in our verification processes and helping them meet our increasing demands.

 

Update: May 2016

Milena Pighi and Ulrike Garanin in an interview situation.

Inter­view.

When you make a commitment, you also want to have an impact.

Milena Pighi and Ulrike Garanin

Milena Pighi, responsible for CSR Communications at the BMW Group and Ulrike Garanin, CEO of the Joblinge umbrella organisation.

The BMW Group’s social commitment relies on partnerships worldwide. These not only have to fit the carmaker’s core competences, but also deliver measurable success. With 35 million euros invested annually in social projects, the Munich company really wants to make an impact.

“When you make a commitment, you also want to have an impact.”

The BMW Group’s social commitment relies on partnerships worldwide. These not only have to fit the carmaker’s core competences, but also deliver measurable success. With 35 million euros invested annually in social projects, the Munich company really wants to make an impact.

For Milena Pighi, responsible for CSR Communications at the BMW Group, the Joblinge Initiative is something of a flagship project. With a success rate of 70 per cent, there are strong indications that Joblinge is doing a lot of things right - even though its target group – unemployed youth – is far from easy. The initiative focuses on finding training places for these young people and giving them the chance to take control of their lives.

This is hardly surprising when you consider that the initiative was founded almost ten years ago by BMW – or, rather, BMW’s Eberhard von Kuenheim Foundation – with the Boston Consulting Group. From the very beginning, both partners had similar ideas about how to organise social projects. 

We talked to Milena Pighi and Ulrike Garanin, CEO of the Joblinge umbrella organisation about a cleverly-structured network, measurable social success and a target group that schools and public bodies still have trouble accommodating.

The BMW Group is involved in just over 200 sustainable and social projects in over 42 countries worldwide. How do you keep track of what is going on?

Milena Pighi: The issue is not the number of projects, but how to ensure quality. That’s why the BMW Group works with local partners on every project. It is also the reason why we don’t take on any finished projects. At the same time, we want make a targeted contribution in areas where we have expertise and where our employees can get involved.

So, you mean in technical fields?

Milena Pighi: Right. We support young people in mathematical and technical fields and find them training places that will help them realise a better future. We are also involved with projects for road safety, social inclusion, responsible use of resources and intercultural understanding. After all, we are a multicultural company ourselves. None of this – and this is important to us – is about reputation. It’s about really wanting to make an impact and achieve measurable social improvements.

Milena Pighi

Milena Pighi

That’s probably a lot more work than just making a sizeable monetary donation?

Milena Pighi: I think companies have realised in recent years that social commitment is primarily a strategic issue. Anyone can donate money. But our customers and employees expect us to actually change things, create added value and accept corporate responsibility. 

We really want to have an impact and create added value.

Milena Pighi

With a partner like Joblinge, that really seems to be working. You founded this initiative together almost ten years ago. How did that come about?

Milena Pighi: The stand-alone initiative that exists today was founded in 2007 by BMW’s Eberhard von Kuenheim Foundation and the Boston Consulting Group. During the financial crisis, many companies got a lot of bad press. We wanted to counter that with a positive example of corporate responsibility.

Ulrike Garanin: At the time, the „Bavarian State Ministry of Education, Science and the Arts“ was looking for solutions for young people without an apprenticeship. It may surprise some people, but we have around half a million young people in Germany with no chance of finding a way into employment and training – even in a healthy economy, with demographic change and a shortage of skilled workers. These young people tend to be cynical about “equal opportunities”.

How do you mean?

Ulrike Garanin: Many of them are deeply affected by what they have been through.Their experience shows that where you come from unfortunately still has a huge influence on their future. The young people who come to us need individual attention and support that schools and other public bodies are unable to provide on their own. And that is exactly where we come in.  

Joblinge’s appeal lies in its measurable parameters for success.

Ulrike Garanin

But it was clear from the start that the project was meant to be more than just another roundtable?

Ulrike Garanin: Absolutely. As a consultant with the Boston Consulting Group, I was one of the founders of Joblinge. We spent a lot of time thinking about the target group in the beginning. And, of course, we also looked at programmes that worked well and many that –unfortunately – didn’t. As we were developing the concept, it was important to us that our approach be measurable, sustainable and scalable.  

…and you realised you could only find solutions working together with partner companies?

Ulrike Garanin: We built ourselves a network of expertise in education, politics, science and business. Now, we have more than 1,500 companies across the country that not only help us with internships and apprenticeships, but also provide around 1,300 volunteers. These play an important role in our programme as mentors. The BMW Group may be our longest-standing partner, but it is by no means the only one. In recent years, we have accepted more than 3,500 young people into the programme. More than 70 per cent of them went on to apprenticeships and jobs. Our placement rate is much higher than average – and that is something we are extremely proud of.

Milena Pighi in an interview situation.

Ulrike Garanin

That means anyone who participates in the Joblinge programme has a realistic chance of finding an apprenticeship?

Ulrike Garanin: Not only that: They stick with it, too. 80 per cent of the young people who joined the Joblinge programme are still in training six months on.  

80 per cent are still in training six months on.

Ulrike Garanin

That’s pretty impressive. It means Joblinge manages to keep far more young people on track than most other programmes.

Ulrike Garanin: We try to find alternative, practical learning formats for our participants to learn the skills they need. With BMW, we are currently developing an app for our technology programme that will allow young people to improve their knowledge of maths, physics and IT in a fun but measurable way. They use apps every day. They think apps are cool – so we’re trying to take advantage of that.

Milena Pighi: We definitely need young talent – especially for technical professions, such as production mechanics. But the target group often lacks the necessary basic knowledge. Now, they can learn all of that through an app. If the app improves our chances of interesting tech-savvy “Joblingers” in an apprenticeship with the BMW Group, it’s a win-win for everyone.

What if they take their newly-gained knowledge and find an apprenticeship with the competition?

Milena Pighi: Then, we’re just as happy. Either way, we’ve added value – and that is exactly what social commitment means for us.

Bad prospects shouldn’t be confused with a lack of potential.

Ulrike Garanin

But there’s no app for social competence, is there?

Ulrike Garanin: No, we have to rely on practical experience for that. What that means is: They initially acquire key qualifications and social competences in group projects at the Joblinge site and, of course, “on the job”, in internships with our partner companies. They have to do well and show us that they can take charge of their own lives. 

Ulrike Garanin  in an interview situation.

Milena Pighi

And which social competences are we talking about?

Ulrike Garanin: It starts with basic things like punctuality, team skills and handling conflicts. Many of our “Joblingers” aren’t good at maintaining eye contact when they start out. Most of them will avoid conflict in difficult situations. All of these are behaviours acquired over the years that we try to change through individual attention.

How does that work?

Ulrike Garanin: For a start, it means not confusing bad prospects with a lack of potential. It usually indicates a complete lack of reliable support. And that is precisely what they get from us: on the one hand, from our staff; on the other, from the mentors at our partner companies who support the young people throughout the entire programme.

It’s touching to see how proud the “Joblingers” are of their mentors.

Milena Pighi

How does that make a difference?

Milena Pighi: It’s really touching to see how proud most of them are when they realise that there’s someone in the professional world who is there for them. A mentor serves as a role model for the young people. It’s really important they are there throughout the programme – and not transferred abroad, for example. 

But the volunteers probably encounter more than just gratitude …

Ulrike Garanin: Anyone in the Joblinge programme is there for a reason. Even so, they may well have trouble getting to mentoring meetings on time on a regular basis, and things like that. It’s important that the mentor doesn’t take it personally – even if they themselves are making a real effort to find time for their “Joblinger”, alongside their own work and family. But changing this kind of behaviour is an important part of the learning process for young people in the programme – and an essential part of their training. Our mentors don’t have to deal with these issues on their own – we provide training at the start of the programme to prepare them for situations like this and support them throughout their six-month volunteer period.

What happens during the six months with the mentees?

Milena Pighi: I actually mentored a 17-year-old myself. When he first came to Joblinge, he didn’t know what he wanted at all. We helped him become more flexible, look at things from a different perspective and keep his options open. That has given him a lot more confidence.

Ulrike Garanin: These young people have to learn to accept Plan B, if Plan A doesn’t work out. There’s more than just one goal or profession, like being a soccer player or a pilot. There are always alternatives – and they may be more realistic with regard to abilities and the local job market.

Young people learn to be flexible. And that gives them confidence.

Milena Pighi

And, then, after six months, they’re able to get by without a mentor?

Milena Pighi: Personal relationships develop over the course of the programme and many stay in contact with their mentees after their training starts. We always like to hear of someone coming back and inviting their mentor for lunch or dinner. Or – as I’ve seen myself – celebrating an apprenticeship together.

Ulrike Garanin: For us, every single person who escapes from the welfare system and stands on their own two feet is a huge success. Not all of them want to stay in touch with their mentor, of course – and that’s totally okay. Some of them may not want to be reminded of who they were before. It has a lot to do with pride and dignity. But – and this happens more and more often – our sweetest success is when Joblingers contact us, because they want to get involved themselves. This means that the process of integration has succeeded far beyond training and the job market.

It is interesting that 60 per cent of “Joblingers” already come from a migrant background and some came to Germany as refugees.

Ulrike Garanin: Yes, these are young people who have been in Germany for two or three years. They have already had some language training and are able to participate in the regular Joblinge programme. Now, we are launching another programme targeting relatively low-qualified 18-to-25-year-old refugees who only recently arrived in Germany, and – like the other young people at Joblinge – would fall through the cracks without extra help. 

So these are young people who don’t have the language skills or educational qualifications to find a training place?

Ulrike Garanin: Exactly. As part of the Joblinge programme for refugees, for example, we are working with partners to develop job-related language training that enables them to complete simple tasks as quickly as possible. Most of them need to earn their own money to get by. Many have debts from their escape or have to support relatives back home. Experts believe that having a job with a daily routine and the chance to regain control of their own fate is a very important factor in stabilisation after traumatic experiences.

It’s only demoralising to help if it leads nowhere.

Milena Pighi

Milena Pighi  in an interview situation.

Milena Pighi

So, it sounds like there are quite a few differences from the previous Joblinge programme?

Ulrike Garanin: This group will be much more diverse than the young people we have currently. They will be coming from different places in terms of education, job training and language skills and will be in different phases of the asylum process – which naturally affects their housing and work-permit situation. All of this has to be taken into account in the programme, and also in our cooperation with partner companies and volunteers. We are currently in the process of expanding our team so we have more employees who feel at home in different languages and cultures. Even with the large number of volunteers who want to help refugees, we still need the continued support of volunteer mentors who can help these young people enter the world of work.

There is certainly no shortage of people who want to help.

Milena Pighi: I’m sure there are many more in Germany, in fact, who would do more. It’s only demoralising to help if it leads nowhere. People want to have an impact – and a long-term strategic commitment is rewarding for everyone involved. 

 

 

Update: April 2016

Ursula Mathar sitting at a table, talking.

Interview.

This is just the beginning.

Tony Douglas

Head of Strategy, Marketing and Communications at the BMW i Mobility Services.

BMW is currently in the middle of a radical rethink: looking at solutions to enable people in the cities of the future to get from A to B as easily as possible. And that has relatively little to do with classic car building. Anyone who thought the Munich-based company might rest on its laurels after the successful launch of its DriveNow car-sharing service would be wrong – completely wrong.

“This is just the beginning.”

BMW is currently in the middle of a radical rethink: looking at solutions to enable people in the cities of the future to get from A to B as easily as possible. And that has relatively little to do with classic car building. Anyone who thought the Munich-based company might rest on its laurels after the successful launch of its DriveNow car-sharing service would be wrong – completely wrong.

When the Munich car manufacturer launched its DriveNow car-sharing service in Germany 2011, no one could have foreseen that sharing a BMW or MINI with others would suddenly become so cool. Car ownership? No longer what city dwellers aspire to! Facing high CO2 emissions and congested roads, they prefer to only use a car when they need it!

Today, DriveNow is available in nine cities around the world with more than 600,000 customers and is the market leader in Germany with 490,000 customers. In early 2016, BMW launched ReachNow, its American DriveNow equivalent, in Seattle. More than 11,000 members signed up in just five days. So car sharing is definitely a success story for BMW. But what comes next? Is saving cities from gridlock enough? “By no means!” promises Tony Douglas, head of Strategy, Marketing and Communications for BMW i Mobility Services. “This is just the beginning!” Under the umbrella of its new BMW i Mobility Services business unit, the Bavarian company is developing a wide range of additional solutions to complement DriveNow and ReachNow, including services such as ParkNow and ChargeNow. 

However, as a premium supplier, BMW will remain true to its promise of sheer driving pleasure: Its strategic focus is on “having it all”. This means that alongside the BMW i Mobility Services business unit, which, with BMW i, is shaping the “future of mobility”, there will still be cars like the BMW M models, which represent the “future of performance”.

The BMW slogan “sheer driving pleasure” stands for a premium experience, not just big cars. You are obviously redefining the concept of individual mobility to ensure this kind of experience remains possible in cities?

Tony Douglas: You’ll still be able to have fun driving a BMW M down the autobahn. But if you are stuck in traffic, that is no longer a premium experience – you are absolutely right. That is why our new BMW i Mobility Services business unit is focusing on offerings such as DriveNow, or apps and other innovative solutions to enable people in cities to get from A to B as easily as possible – with or without a car.

People will no longer own a car themselves – they’ll use one.

That will take a big rethink – starting with people getting used to not having their own car waiting outside in the garage…

That process began a long time ago. A lot of people no longer own their own car, in fact. It started back in 1973 with the launch of BMW Financial Services. Today, leasing accounts for 80 per cent of their business. There has already been an initial shift from “I own a car” to “I finance a car”. I’m pretty sure the next phase will be “I use a car”. With DriveNow, I only pay for what I use. That’s new.

People are already using Airbnb to rent out rooms and homes they don’t need. Sharing seems to be “in” …

If you look at how people are responding to this kind of offering, we are not talking about an insignificant trend – this is a huge business. Just look at Silicon Valley! Four years ago, everyone was raving about social media; now it’s all about “usability”. Everybody is talking about Uber, Lyft , Airbnb. That stuff is cool – and it makes sense. Do you know how long a car is used every day on average? About half an hour! It makes neither economic nor environmental sense to own a car. And many people have realised that.

Two years in, Drive Now is already earning a profit. Where do you go from here?

We introduced more than 800 BMW i3s to our DriveNow fleet in 2015 – most of them in Copenhagen, where the entire DriveNow fleet is all-electric and integrated with local public transport. In Seattle, where we launched our car-sharing brand ReachNow at the start of the year, we are already planning a range of different add-on services – for example, scheduled vehicle delivery to a specified location for defined user groups. A chauffeur service is also planned.

Car sharing will help electro-mobility break through.

So cities will go electric?

I firmly believe that electro-mobility is the way forward for cities. Car sharing will help electro-mobility break through. We are also expanding our entire fleet to help cities like Munich, Cologne or Dusseldorf achieve critical mass.

What does that mean?

Customers shouldn’t have to walk more than 400 metres to one of our cars – that’s the usual distance to a bus-stop. Anything else is a pain, especially if someone snaps up the car before you get there. Car sharing already works really well in big, compact cities like Berlin, Hamburg and Vienna. Of course, it’s harder in cities like Los Angeles, due to the distances.

Tony Douglas in an interview situation.

So, people who used to ride in taxis are now using car sharing?

Let’s take London as an example. “Black cabs” have been around for a hundred years or so – but in the meantime you also have mini-cabs and various car-sharing services. It is easy to see how different types of service with different target groups can coexist. As a result of this, the market has increased fivefold – because, overall, more people are being driven by others. It has also got cheaper: You can send your kids to school in a mini-cab, because you have a conference call or need to walk the dog. Those are all things people wouldn’t have used a taxi for – and that is the major shift. If I can change people’s behaviour and create a new market, I can have an impact. 

DriveNow complements public transport.

That doesn’t exactly sound like car-free cities. On the contrary! Wouldn’t it be more practical to expand the public transport network to get from A to B?

Mass transit is not always the best solution. It is ideal if you need to bring a lot of people to a certain hotel, for example. But what if you want to visit grandma out in the suburbs? That might be tricky. And, for that matter, buses that drive the same old routes almost empty are neither sustainable nor profitable. We see public transport as the backbone of urban mobility – but DriveNow provides the perfect add-on for certain needs. We have developed a special software for the i3’s navigation system that combines both forms of transport for the best possible solution.

And how does that work exactly?

It’s quite simple: The navigation system shows me the fastest route from A to B – but not just by car: It might guide me to a Park&Ride, where I can catch a local train. From there, my smartphone takes over – for instance, with an integrated function that allows me to buy a ticket. Once I get to the city, I can rent a bike – say, from “Call a Bike” from the German railway company, Deutsche Bahn. When I’m done, the app takes me back to where I started – my car. This service will be available in Germany for the BMW i3 by late summer. All other cars in the DriveNow fleet will follow shortly afterwards.

Find a parking spot, reserve and pay for it – all via app.

Tony Douglas in an interview situation.

That is certainly better than standing in traffic. But it doesn’t solve my parking problem if I want to go out to the pub in the evening. I would still think twice about using Drive Now or taking public transport.

Very wise! 30 per cent of people driving around town are looking for a parking space. 30 per cent! That’s a huge business. On average, people spend around 20 minutes driving around the block, looking for a parking space. At some point, they get so frustrated they just want to get rid of their car and drive into the nearest parking garage and pay to park. 

…which is not part of DriveNow.

No, but we do have a solution for this problem. The app is called ParkNow. It was just tested in San Francisco and will be available in Germany by the end of the year.

And ParkNow can find me a parking space?

Exactly. The app gives you an overview of the parking situation, allows you to make a reservation and directs you to your spot. Your electronic ticket gives you access to the parking garage, and you use your smartphone to pay – via text, app or phone call. 

With BMW I Mobility Services, BMW is departing from its core business as a classic automobile manufacturer after almost a hundred years. Have you really thought this through?

There will always be people who want to own a car and those who prefer to lease. And others will simply pay for using a car. I always say, it’s not an “either/or” situation; it’s an add-on that extends my target group and opens up new markets. Someone who buys a BMW today drives the same car in summer and winter. With DriveNow, they could theoretically rent a different car to suit their needs several times a day: a convertible for a sunny day and an X model to transport larger items.

That certainly sounds more flexible.

If you develop that idea further, in the future, you could, for example, rent an apartment that not only comes with a pool, but with a whole fleet of cars. It is called “campus mobility” and would be offered as a service by the landlord or operators of a residential complex. The vehicles would be part of the building and could be picked up from the concierge by the renter – an electric car for the city, an M3 for a drive in the country or an X4 for a skiing trip. That is what we are working on currently – and it will surely become reality!

 

 

Update: March 2016

Ursula Mathar sitting at a table, talking.

Interview.

CO2-free production doesn’t happen by chance.

Jury Witschnig

Head of Sustainability Strategy for Product, Production and Environmental Protection.

The BMW Group aims to meet 100 per cent of its energy needs from renewable sources – despite producing more than two million cars a year. The Munich auto manufacturer still cautiously talks about this as a vision – but it is a vision already backed by a strategy with very concrete goals.

“CO2-free production doesn’t happen by chance.”

The BMW Group aims to meet 100 per cent of its energy needs from renewable sources – despite producing more than two million cars a year. The Munich auto manufacturer still cautiously talks about this as a vision – but it is a vision already backed by a strategy with very concrete goals.

A lot of companies use wind turbines and solar energy, but there aren’t many who have 25,000 cattle or their own landfill. The BMW Group has all of those things – and is embarking on an exciting, but carefully calculated, adventure. The team led by Jury Witschnig, the man responsible for sustainability strategy at the BMW Group, recognised long ago that CO2-free production is about much more than generating renewable energies.

We talked to Witschnig about the company’s ambitious efficiency targets, South African cattle herds and the challenge of renewable heat production.

Your vision of a CO2-free energy supply is very ambitious. Why do you set yourselves goals like that? It’s not like vehicle CO2 emissions – no one is forcing your hand on production.

Jury Witschnig: You’re right, of course. As far production is concerned, there are no legal requirements for CO2 emissions. But there are certain expectations or sometimes an obligation to participate in regional emissions trading. We are, in fact, acting in our own interests. Our vision of a CO2-free energy supply is not just motivated by the idea of replacing fossil fuels like coal, oil and gas with renewable energies, such as wind or solar power. That would certainly be possible, but not very economical.

What do you mean then?

Energy is expensive. Environmental protection and resource consumption have quite rightly been important issues for our company for more than forty years. A few years ago, we decided to put a price-tag on every megawatt hour consumed to make it clear just how much money is actually involved. This led the company to commit to reduce energy consumption per vehicle produced by 45 per cent between 2006 and 2020. When we reach this goal – and there is no doubt in my mind that we will – we will be well on our way to CO2-free production.

Of course. What you don’t use doesn’t cost anything and doesn’t produce any emissions.

Exactly. Reducing energy consumption has saved us more than 150 million euros since 2006 – and that benefits the environment, too, of course. That is why we try to make what we do as transparent as possible to show our customers that we are behaving in a responsible manner and using resources carefully.

We aim to lower energy consumption by 45 per cent by 2020.

But the company is still way ahead on resource consumption. It only takes about two megawatt hours for you to produce a car. That is half what a single-family home uses in a year – only the BMW Group produces up to 400,000 cars at one location.

We are well aware of that. That is why we are constantly monitoring and optimising energy consumption at our 30 locations worldwide to keep consumption constant as production increases – and, ideally, to reduce it further. 

By doing what exactly?

The paint shop accounts for about 50 per cent of the total energy used in production, for instance – and so that offers the greatest leverage. Paint needs heat for drying, liquids in the dip tanks have to be warmed and many other things. At some sites, we have 100 to 200 metre-long areas just for air purification. So, you can imagine how much energy that uses. We have adopted the “reduce, reuse, recycle” principle to identify which processes can be eliminated or combined, or where ventilation systems can be optimised or cycles closed – with the result that we use only half as much energy in our paint shops today.

We have already reduced waste by 70 per cent.

Can you transfer this know-how to other locations?

That is precisely what we are doing. Automobile production is very similar all over the world. We are able to transfer what we learn at our plants in Munich, Leipzig or Spartanburg as best practice to other plants, to keep on raising the bar. Our newest plants always have state-of-the-art production. For a long time, it was our site in China. In the meantime, technology has moved on – and that will benefit our plant in Mexico, which will start production in 2019. In this way, we have reduced our energy consumption per vehicle produced by about 35 per cent since 2006.

Jury Witschnig in an interview situation.

So you’ve nearly reached your energy consumption goals – but what about water and waste?

That’s the next step. In actual fact, we already obtain more than half the energy we need from renewable sources – we are a leader in our industry. We are currently being very cautious with regard to concrete figures, because we only have limited influence on many external factors, such as government policy and energy prices. I personally believe that we will reach 100 per cent over the coming years – under ideal conditions, perhaps already by 2020.

When it comes to renewable energies, we rely on local solutions.

But that still leaves you with a lot of residual demand you need to find green sources for.

That’s the next step. In actual fact, we already obtain more than half the energy we need from renewable sources – we are a leader in our industry. We are currently being very cautious with regard to concrete figures, because we only have limited influence on many external factors, such as government policy and energy prices. I personally believe that we will reach 100 per cent over the coming years – under ideal conditions, perhaps already by 2020.

What makes you so optimistic?

The strategy we developed has allowed us to triple our percentage of renewable energies over the past five years. Sustainability doesn’t happen by chance. We know exactly which location is suitable for solar power and which is better for wind power; how much green electricity we can buy; whether there are investment partners and what is going on on the political front. In this way, we have developed a viable technical and economical solution for each location, which we are now implementing step by step.

Jury Witschnig in an interview situation.

Wouldn’t it just be easier to buy in green energy?

But that would be no fun and not economical at all! We are engineers at heart. We are fascinated by new technologies. I don’t think there is any other field with so much going on as in renewable energies. That makes it extremely attractive to us and somehow, it’s a good fit. Not to mention the fact that renewable energies are often cheaper than conventional power.

And why is local production so important?

So that we can use the energy generated where we need it. That saves transmission charges and creates a genuine connection to what we are doing. It doesn’t matter whether we are talking about our four wind turbines in Leipzig, the UK’s largest solar installation on the roof of the MINI plant in Oxford or….

The waste from 35,000 cattle meets 30 per cent of our energy needs.

… 25,000 cattle in South Africa?

Exactly. It’s all about efficient use of residual material. It’s a great idea – with the advantage that fermentation residues from the animal excrement can also be used as high-quality fertiliser for farmland. When we launched the project in 2009, biomass power plants were totally new to South Africa. There was a lot of pioneer work to do. But biomass was the obvious solution for our plant in Rosslyn, north of the capital, Pretoria, which is surrounded by huge farming areas. The region is also home to a large number of rainwater basins, which provide water for fermentation and the farm animals.

How much electricity can you generate this way?

The biomass power plant supplies about 30 per cent of our energy requirements in Rosslyn. And, by the way, at our Spartanburg site in the US, we use methane gas from a nearby landfill. It meets more than half our local heating needs.

It would take several football fields of solar thermal installations to provide the heat we need.

That sounds great, but it mainly applies to electricity. What about heat generation? After all, it does account for the other half of the energy you need.

From an economic perspective, it would be impossible for us to generate the amount of heat we need from renewable energies. It would take several football fields of solar thermal installations to provide that amount of heat. That doesn’t make sense. But we are certainly looking for alternatives in this area and already using innovative technologies – for example, solar cells that produce heat we can use in the paint shop at our Rosslyn plant. For this, we are working on several promising research projects in parallel.

For example?

In Dingolfing, we are currently testing a high-temperature storage unit, buried up to 700 metres under the ground with the Technical University of Munich. This stores excess thermal energy accumulated during the summer at a combined heat and power plant, for retrieval during the winter as needed. If it works – and it looks like it will – the project will make an important contribution to heat storage.

We can’t avoid buying electricity yet.

But you can’t wait for that.

For the next few years, we won’t be able to avoid buying electricity, but we can make sure we use electricity from renewable sources – and continue to expand this until we reach 100 per cent. Until then, we will continue to use gas, because it is the most sensible bridge technology for us, with the lowest freight CO2

For many new technologies, you bring in expertise from outside the company. Isn’t there a risk that your competitors will benefit from this know-how?

Why not? Energy is not one of our core competences. I believe others should be able to use what works for us. In Landshut, for example, we developed the first emission-free foundry together with suppliers. They are now taking these systems out onto the market and selling them worldwide. That leverages incredible economies of scale for sustainability. 

So the next big step will probably be to persuade suppliers to use CO2-free energies?

That’s right. Over the next few years, we will be sharing our environmental experience with them. I am looking forward to this, because it will have a hugely positive impact on sustainability. We haven’t yet calculated exactly how big this effect will be, but I’m reckoning factor 10 to 100.  

You talk about 100-per-cent sustainable production but you still sell gas-guzzling sports cars. How do you justify that?

You could ask why we don’t sell just electric cars. But it is our customers, not us, who set the pace. It is a process: Customers will come to understand that electro-mobility doesn’t mean doing without – it offers a new form of driving pleasure! Of course, we still need to lower the emissions of our petrol cars. That is required by law – and, at some point, also demanded by customers. But, in production, we are certainly a step ahead: Everyone at the company plays their part in this.

 

 

Update: January 2016

Daniela Bohlinger sitting at a table, talking.

Interview.

We make sustainability you can touch.

Daniela Bohlinger

Head of Sustainable Design for BMW, MINI and Rolls Royce.

Hemp, kenaf, eucalyptus wood and PET bottles spun into yarn – all of that sounds pretty “eco”, but looks extremely cool in the BMW i3. To transform the ecologically-correct little city car into a premium experience, BMW designers are venturing into new territory. The entire BMW fleet is now set to profit from their experience.

“We make sustainability you can touch.”

Hemp, kenaf, eucalyptus wood and PET bottles spun into yarn – all of that sounds pretty “eco”, but looks extremely cool in the BMW i3. To transform the ecologically-correct little city car into a premium experience, BMW designers are venturing into new territory. The entire BMW fleet is now set to profit from their experience.

When you climb into the BMW i3, you immediately notice the large pores of the eucalyptus wood in the dashboard, the fibres of the hemp and the leather seat covers dyed with olive leaves. These are beautiful natural materials people love to touch, staged by designers with “great care and an incredible amount of work”, according to Daniela Bohlinger. The designer and her colleagues certainly had their work cut out with the i3: They are the ones who, throughout the entire design process, determine up to 70 per cent of the car’s sustainability footprint. 

We talked to Daniela Bohlinger about sustainable materials, varying levels of acceptance among customers – and the art of transforming hemp, PET bottles and natural wood into a premium experience.

When you open the door to the i3, your first reaction is “Wow!” The interior is somehow different – certainly a lot bigger than expected.

Daniela Bohlinger: You mean that loft feeling? That is exactly what we were aiming for. When we started out with the design, we said we wanted to create a totally new experience with the i3. We wanted our customers to associate sustainability with premium, not going without. For us, it’s not just about high-quality materials and meticulous attention to detail, but about choosing materials produced in a sustainable manner. 

Aren’t you worried it will be too “green” for some customers?

We have looked at our target group very closely. We believe that our BMW i customers want to show that they live a sustainable lifestyle – and we can help them up with that. For this, we have developed a completely new product and design language that is clever, clean and inspiring. 

Reduction to the essential contributes to sustainability.

The effect is quite understated.

We expect a strong design to create the desired effect with as few lines as possible. In a minimal design language like this, details are more important than ever. Reduction to the essential also plays an important part in sustainability. The fewer materials we use, the smaller a product’s carbon footprint. 

That makes sense. So what criteria does a sustainable material have to meet at BMW?

We are currently drawing up a full catalogue of measurable sustainability criteria. Until we complete that process, we will follow the generally accepted practices of ecological institutes and universities who specialise in these topics. This includes preferring recycled materials over new materials. That is only logical. Of course, it also makes sense to close material cycles. The next step is to focus on natural products, because you can use renewable raw materials from sustainable production indefinitely.

How much “eco” is there really in the i3?

Overall, we used 25 per cent renewable natural materials in the interior of the BMW i3 and recycled materials for plastics. No one has ever done that with that degree of consistency before. It was a very exciting process for us, because every material opened up a whole range of possibilities. In the design department, we know how to highlight materials’ strengths.

Different colours and patterns in the wood make it more authentic.

Can you give me an example?

Take the eucalyptus wood in the dashboard. It is 100 per cent from certified forestry. The customer doesn’t see that, of course, but it was important to us that they experience the material in its natural state – so with BMW i, we decided not to treat the wood and just used a UV blocker and liming to highlight the structure of the pores. This does mean that the wood will change its appearance over the years. 

Daniela Bohlinger in an interview situation.

To create a patina?

I wouldn’t exactly call it a patina, but yes, more like the natural change you see at home with your wood furniture. Wood darkens with age and the colour changes. This is particularly true with eucalyptus wood, because it takes on a darker yellow or red colour – and we allow it to! For me, that’s what makes the material authentic. It took a while to persuade people within the company that it was okay for the wood to change. 

Well, you obviously succeeded!

Yes, I found a way to control the way individual woods in the interior change colour. The way to do this is to make the different elements inside the car from a single tree. And it works! I recently spoke to a customer who bought an i3 about a year ago. He told me that the wood had changed, but evenly. That type of change isn’t a flaw, it’s a natural feature – and that enhances sustainability. 

What about knotholes and other structures in the wood? They’re also natural features.

BMW always used to have a basic sample book with different types of wood. Anything that didn’t fall within that range was not even considered. But with the i3, we took a completely different approach. We tolerate movement, structure or colouring in the wood – not because these are natural features, but to minimise waste. That also contributes to sustainability. 

Daniela Bohlinger  in an interview situation.

Surely, there are other ways to reduce the number of rejects...

We see it as our obligation. With the seats, for example, we don’t insist that seams have to be completely in line because that increases the amount of scrap. The great thing is that intelligent design can make so-called faults in the material appear completely authentic. In the i3, for example, we used a wool blend for the seats. Wool contain snarls, of course. So we went for a lounge look with a slight salt-and-pepper effect. A knot or two emphasises the overall impression we are looking for. 

Leather seats are the epitome of luxury for our customers.

Any there any limits to your good intentions to use green materials?

Definitely when it comes to leather. We know from our market research that leather epitomises luxury for our customers. They still want leather, even if there is a shift towards a more vegan lifestyle overall. That does not apply to cars. Internal inspections are extremely strict at BMW, especially for leather. Car seats are subjected to extreme stress. Ketchup is a killer for leather, for example. That is why automotive leathers use more dye than armchair leather. It makes the leather appear a lot more compact, but makes it much more durable and easier to take care of. 

But the i3 still has leather seats. How did you solve the problem?

The only issue with leather, from an ecological perspective, is the tanning process. So I contacted a company in Germany that I knew developed tanning agents from olive-leaf extracts. But, unfortunately, the leather didn’t look that great, so we worked together to refine the tanning agent. By the time we were finished, we were even able to apply a minimal layer of colour. 

It sounds like you weren’t too happy with the solution?

My vision is to use vegetable-tanned leather, ideally from organic cattle. It would definitely appeal to customers and provide a wonderful experience of a material that ages gracefully and people like to touch.

…but it’s not very durable.

But if customers appreciate the material as much as it deserves, they might be willing to change their behaviour. That would show how much they value it. 

We are looking for an alternative that performs just as well as leather.

But I can’t exactly eat my burger on fabric seats either …

That’s why we need a new material that feels and performs like leather. In other words, we need an alternative to leather – and that’s what we are looking for, currently. That is a huge challenge for us designers. Once we find a material like that, we would be able to gradually phase out leather. 

What’s the situation with recycled materials? Do you have anything exciting going on?

Yes! We are currently looking at waste products from production of seat covers. They have fluff on the sides, which is already made into balls to produce painting mats, for example. Now we are wondering: Why don’t we close our own cycles? The material still looks like it has a life of its own – it’s a bit fluffy, like felt. The MINI designers and I are thinking about how we could change that. It’s a long and exciting process. In about two years, I’ll be able to tell you whether the material has potential or not.  

Where do you get your ideas from? Do you use a special software?

The software exists, but it isn’t really how I like to work. I prefer to go to trade shows and things like that. I’m always on the lookout. I recently saw a bag made from a very interesting material in Göteborg. I bought it and now I’m researching who produces the material. Or else I go to furniture stores, look at surfaces and textures and photograph them. My phone is full of photos that inspire me. I always monitor the latest trends. I follow what is happening in lifestyle cities like San Francisco, Vancouver or even Stockholm, and keep an eye on what is going on in the field of sustainability at universities. 

We require suppliers to commit to our sustainability standards.

The natural fibre kenaf you used on your door panels comes from Bangladesh – a country that does little to protect its workers from exploitation. How do you ensure that the eco-trend is not at the expense of people in developing countries?

Colleagues from BMW Purchasing go out there and meet the suppliers and check out local conditions. In Bangladesh, for example, they sat down with the suppliers and went through the supply chain together. We also commissioned a testing institute to ensure that the fibres are harvested and sorted under fair conditions. We can honestly say that we take all of these aspects into account and require our suppliers to commit to our sustainability standards in their bidding documents.  

With the i3 on the roads, where do you go from here?

BMW i vehicles are a shining example of how to maximise the experience of sustainability. That is what they are all about. My job now is to transfer what we have learned from the i3 to the entire BMW Group – and make sustainability just as real for MINI, BMW and Rolls Royce customers. We are currently figuring out what are the limits to the premium experience. A Rolls Royce customer has totally different aesthetic standards for surfaces and textures than, say, a MINI customer.

What do you expect the car of tomorrow to look like?

Natural and recyclable materials won’t need to be as obvious in the future. For many customers, knowing that a material is sustainable is enough. And BMW is committed to taking care of that for the customer. I am sure it will soon become perfectly acceptable for cars not to be super-compliant, but to display more individual characteristics through the use of natural materials. This will take another paradigm shift within society – but it will come. Due to the high number of cars in the automobile industry what we are doing here will not go unnoticed. I am very optimistic about that. 

 

 

Update: Febuary 2016

Ursula Mathar sitting at a table, talking.

Interview.

Sustainable mobility – that is our vision!

Ursula Mathar

Head of Sustainability and Environmental Protection at the BMW Group.

When it comes to sustainability, BMW, as always, leaves nothing to chance – and has led the field in all major sustainability ratings for years. Ursula Mathar is Head of Sustainability and Environmental Protection, an integral part of the BMW Group’s corporate strategy. In the interview, she explains why sustainability and commercial success are not mutually exclusive and how the company also devotes itself on a global scale to environmental protection and human rights.

"Sustainable mobility – that is our vision!"

When it comes to sustainability, BMW, as always, leaves nothing to chance – and has led the field in all major sustainability ratings for years. Ursula Mathar is Head of Sustainability and Environmental Protection, an integral part of the BMW Group's corporate strategy. In the interview, she explains why sustainability and commercial success are not mutually exclusive and how the company also devotes itself on a global scale to environmental protection and human rights.

With the i3 and i8 the BMW Group introduced the first premium electric vehicles in Europe, demonstrating a commitment that is thus far unmatched. Is this paying off for the company?

Ursular Mathar: Absolutely. Our industry is at a turning point, and not only technologically. With our entry into electromobility, we have not only taken a clear stand as a carmaker for emission-free mobility; we have also taken the concept of sustainability across the entire value chain to a new level – all the way from raw material extraction to environmentally-friendly recycling at the end of a vehicle’s life. Our aim is to be the leading, most sustainable premium provider of individual mobility. 
  

You obviously like to set benchmarks. The BMW Group is already highly-ranked in all major sustainability ratings.

(laughing) And we’re very proud of it. But I can’t think of another company where sustainability is addressed so consistently in all departments, ensuring that it is incorporated into the work of all 110,000 employees of the BMW Group.  

Responsible conduct is simply essential nowadays.

Why do you as a premium carmaker attach so much value to a “green conscience”?

We are convinced that responsible, socially acceptable conduct is an integral part of being commercially successful as a company today. The demands our customers place on our products and how they are manufactured have changed considerably in recent years. Global challenges such as climate change, urbanisation and resource scarcity are increasingly cause for concern. We take this very seriously and with our innovative efficiency technologies provide our customers with environmentally-friendly and cost-saving improvements so that they can continue to enjoy the “sheer driving pleasure” they expect from BMW. Optimising our fleet’s environmental scorecard is a key aspect and a clear competitive advantage that we would like to build on further.

But this insight was probably motivated by other considerations.

Naturally, we were forced to do some rethinking years ago due to numerous regulatory changes and to undertake major technological efforts to reduce CO2 emissions. We declared this goal from the outset and started working towards it early on with our Efficient Dynamics programme. Without these efforts, we would not have been able to meet the regulatory targets or our own goals – not to mention the goals we have set ourselves for the future.

What are those goals?

For one, by 2020 we aim to reduce the CO2 emissions of our European new-vehicle fleet by at least 50 per cent compared to 1995. In addition, in terms of the consumption of resources in production, we plan to use 45 per cent less resources per vehicle by 2020 compared to the base year 2006. Our long-term vision is to achieve completely CO2-free vehicle production.

Is that realistic?

By all means. With the BMW i3 and BMW i8, we are already on the right track. The electricity required to assemble these vehicles at our Leipzig plant already comes 100 per cent from renewable sources, namely wind turbines.

Ursula Mathar in an interview situation.

You just claimed that hardly any other company pursues sustainability as ambitiously as the BMW Group. Can you elaborate on that?

All members of our Board of Management are also on the Sustainability Board. That is already something special. To my knowledge, most companies have only one person in charge of sustainability. This shows the earnestness with which we approach the topic. For us, sustainability is not an “add on” that we decide to slap on at the end as the icing on the cake, but rather a fundamental conviction – and thus an integral part of every single field of action. 

How does that work in practice?

Each proposal brought before the Board has a passage on the subject of sustainability, which means that each project is examined not only for its economic impact but also for environmental and social factors. We also develop sustainability strategies for each division, which are likewise signed off on by the Board and are pushed forward and implemented with all the means at our disposal. This allows us to put a dynamic into motion at the beginning of each process that could never be attained by a single executive alone. We naturally monitor these processes based on key indicators and check whether the objectives have been achieved. Our managers, for example, have various sustainability aspects outlined in their target agreements – depending on their area of responsibility – which are thus part of their performance-based remuneration.    

We plan to invest in renewable energies at all our sites.

Sustainability requires investment. What criteria do you set here?

The decision to invest is made according to economic criteria. As a business enterprise we can only achieve our sustainability targets if we concentrate on growth and the continuous development of new technologies. Let me explain: We set ourselves the goal of becoming a leader in the use of renewable energy by 2020. At some of our plants, such as the one in Spartanburg, South Carolina, we are already well on the way to setting new standards here. The plant uses methane gas from a nearby household  landfill. But we haven’t come that far yet everywhere. We examine each of our locations and decide whether it is worthwhile investing in renewable energy there. If the decision is negative, the Management Board might defer the project for economic reasons and favour another solution for the time being – for example, using the existing energy supply as efficiently as possible. That doesn’t mean that we won’t reassess the project in two or three years and then obtain energy from renewable sources if possible.

Ursula Mathar in an interview situation.

BMW works with more than 12,000 suppliers in 70 countries worldwide. How can you be sure you aren’t violating any environmental or human rights?

We have learned a great deal in recent years in our dialogue with external contacts from non-governmental organisations and with suppliers, employees and customers, and we have established a clearly-structured risk management system, which we continue to develop and which helps us to identify risks at an early stage. We have established a proprietary risk filter in particular for non-OECD countries that analyses social and environmental risks such as child and forced labour or interference with nature and evaluates them for possible violations of sustainability. The filter involves gigantic databases that we update annually, and in 2013 we also added special risk assessments for all product groups. For particularly critical supply chains we also work together with other companies and stakeholders, for example through the Aluminium Stewardship Initiative.    

We identify and put a stop to compliance violations early on.

How do you do all that from your desk in Munich?

Of course, we need the help of many colleagues as well as people on the ground in the various areas. A value chain this complex can only work if it involves the entire organisation. A purchaser in South Carolina, for example, must be in a position to assume responsibility for his suppliers and also to take any necessary measures to improve their sustainability performance. We therefore train our purchasers and suppliers, and require the latter to include in their offer documents a commitment to our sustainability standards. This also applies to China, where we are working in a joint venture with the local carmaker BMW Brilliance Automotive, or BBA for short. BBA has pledged, as have we, to observe the principles of the UN Global Compact and will publish its first sustainability report this year. As far as I know, this is a first for China. 

But there will always be cases that are beyond your direct control.

Unfortunately, there will always be crime and compliance violations. What's important to us is to have the best system we can for recognising and stopping violations early on and thus keeping their impact to a minimum.

BMW has just substantially stepped up production in China again and wants to increase capacity there over the next two years from 300,000 cars to a total of 400,000. How can this kind of growth be reconciled with your environmental standards?

China is a rapidly growing market in which we want to, and must, participate as a business enterprise. This is part of our commitment to our shareholders. We are, of course, aware that our vehicles contribute to climate change. But we must not forget that we are also improving living standards for many people by promoting human and labour rights and integrating them into our business growth. Most importantly, mobility also represents something of value. I recently had an interesting conversation with the mayor of a small village near Barcelona. He told me that without cars his village would no longer exist because people would not be able to drive to work, visit friends and organise their lives flexibly. The town has no public transport – this really still exists in this day and age! 

Everybody has a right to individual mobility.

But that is an isolated case.

In rural areas this situation occurs more often than you might think. Apart from that, we are convinced that people have a right to individual mobility, whether they live in the city or the countryside. They should have the freedom and flexibility to decide when and how to get from place to place in a way that protects resources and the climate to the greatest extent possible. They have the option to lease or buy a car, to take the train, or in cities to use our DriveNow options or to walk. What I am trying to say is that individual mobility makes people more independent and increases their quality of life. Our task is to recognise these mobility needs early on and offer solutions to social challenges.

The BMW Group is setting its sights on electromobility in the long term. What are the next steps?

We now have to think on a broad scale and apply what we've learned to the entire fleet. This is the only way to have an impact – and to get closer and closer to our vision of sustainable mobility.

 

 

Update: October 2014

Peter Falt sitting at a table, talking.

Interview.

Seriously friendly.

Peter Falt

Director Creative Consulting at Designworks in Los Angeles, a wholly owned subsidiary of BMW Group.

In the sunny hills of Los Angeles, electric cars and veggie burgers have long been part of the new, casual lifestyle. Nowhere else can you find so much engagement as among trend-conscious Californians. Here, being sustainable can be fun – and this will soon turn markets worldwide on their heads, says Peter Falt, design director at Designworks.

"Seriously friendly?"

In the sunny hills of Los Angeles, electric cars, veggie burgers and jute shopping bags have long been part of the new, casual lifestyle. Nowhere else can you find so much eco chic as among trend-conscious Californians. Here, being green can be fun – and this will soon turn markets worldwide on their heads, says Peter Falt, design director at BMW Group Designworks.

We meet up with Peter Falt not far from the headquarters of the Designworks design consultancy in Newbury Park, a suburb of Los Angeles. This is where Designworks was founded in 1972, before being acquired by BMW in 1995 as an independent subsidiary and important supplier of ideas. Since that time, the multiple award-winning creative talents at the company's sites in Munich, Singapore and Shanghai have specialised in mobility and product design as well as design consulting – and have become world leaders in these fields. No one knows more about customer lifestyle trends than they do. Whether they have a hand in developing cars or devote their energies to designing a new mouthwash, train cars for San Francisco's public transport system, or the charging station for the BMW i3 is immaterial to these creatives. "It's the mix that's inspiring," says Peter Falk – and evidently sets out to prove it with the first example he cites: a new American brand that makes mundane oral hygiene products such as toothpaste and mouthwash. What's special about these items is that they call out to customers from the shelves with the brand name "Hello" and claim to be 99 per cent natural and 100 per cent friendly.

This is new, different and appealing. But what is a mouthwash trying to tell me with the message "Seriously friendly"?

Peter Falt: When Craig Dubitsky, the founder and CEO of the start-up, came to Designworks with his concept for the “Hello” product series, it was an instant hit with everyone here. The idea of bringing some beauty and design sophistication to a market that was sorely lacking in both was simply sensational. You have to realise that Craig is a peace-loving person – so he was fed up with all these products that purport to do nothing more in his mouth than fight and kill. We came up with a look for “Hello” that perfectly fits the brand. Seriously friendly. These words are not only printed on the packaging for the mouthwash; they also stand for Craig and his company. If you want, you can reach him anytime on Facebook or Skype.

Friendliness? That's it?

No, it is also important to have the right ingredients. The “Hello” mouthwash is based entirely on natural ingredients – with no artificial colours, chemicals or alcohol. But it still tastes fresh and looks so good that you can take it with you anywhere.

If customers have a choice, they will opt for what's good.

Customers want what's good?

Customers have not only become much more health-conscious; they also want to take responsibility for what they buy. This is a global trend that has led to a completely different system of values. We can therefore speak today of a new type of consumer, the so-called Lohas*. These are people leading a lifestyle characterised by an awareness of health and sustainability issues. They want clean water and clean air but no child labour – only the good and not the bad things. Of course, there will be always people who still prefer to buy low-priced products and who don't care whether the planet has to suffer for it. But their ranks are dwindling.

(* Lifestyles of Health and Sustainability)

Sustainability is trendy. Why?

Trends emerge when people are offered more attractive and better solutions. If you have a mouthwash that contains no harmful substances and is even fun, then it automatically makes all other mouthwashes look bad. Consumers will no longer accept them, forcing other manufacturers and even major corporations to change. This is a clearly a customer-driven trend that no one can afford to ignore. With a product like “Hello”, a small start-up moving in on the territory of multinationals like Unilever can turn a complete market upside down. For us, this was a bit like positioning David against Goliath.

Most people associate sustainability with eco-friendly products ...

That's correct, but there's more to it than that. The products also have to look good. It is therefore up to us to tie together the demands customers place on a product with the market requirements. In other words: If we are able to design a more attractive product with a positive environmental scorecard and to reduce costs at the same time, we win. It makes no difference whether it's a mouthwash, a chair or even a train.

We are able today to make measurably better products.

How do you reconcile all these different requirements?

That's actually a long road, for which we need a roadmap. We first of all distinguish between hard and soft criteria: including environmental impact, costs – and the emotional component. Today, we have powerful tools and databases that render the costs and environmental impact of certain materials measurable, thereby greatly expanding our range of options as designers. For example, I can already evaluate my draft ideas during the design process using special software, and then decide which is best. This enables me to already choose 90 per cent of the materials during the concept phase and to design a – measurably! – better product.

And how do you measure the emotional component?

Emotions are naturally difficult to measure. But we have in-depth knowledge about what people appreciate. And we also listen to them carefully, try out various options and seek dialogue with customers.

Does classic design still play a role at all with so many other criteria to consider?

Design, as always, reflects a product’s DNA, or rather the brand values it represents. The brand values are the product's identity, meaning what the brand represents to the outside world. At BMW, for example, these values correspond with attributes such as “premium”, “innovative” and “sustainable”. These values are conveyed by such things as the shape, colour and proportions of the charging station for the BMW i3, making the station itself a real designer product.

BMW i3 parked in a solar-powered carport with charging station.

BMW i3 Solar-Carport 

Designworks developed a concept for new trains for the San Francisco public transport system. What kind of DNA is evident in these trains?

The look and design of the cars correspond to the values of the people who will be using them. There is a really exciting story behind this: San Francisco deliberately involved the public in the design process by showing people photos and films of our draft designs for the trains. The public response was tremendous. Over 35,000 people agreed to provide input and over 17,000 came to see the final train car, which was on exhibit from April to May in the Bay Area.

What did people say about your designs?

The results of the surveys showed, for example, that cleanliness of the trains is a very high priority for most people. We incorporated this wish in our designs by choosing extremely soil-resistant and low-maintenance materials made from natural raw materials for the floors and seats. In the final evaluation, the seats and floors were rated “excellent” not only by the public, but also by the cleaning staff.

Sustainable products should have also a long life expectancy, meaning they must be high-quality. How do you ensure that without driving up costs?

70 per cent of all innovations are attributable to new materials.

Does that mean that Designworks is always searching for alternative, better materials that are cheaper and can be recycled better?

That's not the only reason. New materials also inspire us to break new ground. When we develop a product, we search our databases for suitable alternatives. We then take a closer look at these materials and automatically start thinking about solutions we never contemplated before. Did you know that 70 per cent of all innovations are attributable to new materials?

Such as in the BMW i3 for example?

Right. It was carbon that made the BMW i3 possible in the first place. In addition, the material is so stable that the car no longer needs a B-pillar. This resulted in a design that would have been inconceivable with any other material. So the material determines the design. Have you seen the key cover for the i3? We developed it out of a sustainable, bio-based plastic. It protects the key from scratches. The trick is that the material is phosphorescent so the key is also easy to find in the dark. That is merely a small invention, but quite an innovative one with real added value.

Today, a luxury yacht and a ballpoint pen, tomorrow, the interior of a car and a charging station. Is versatility Designworks' recipe for success?

We always try to go through the world with open eyes, and therefore deliberately expose ourselves to a wide variety of influences. Whether it's Coca-Cola, the train or BMW, the same process is always involved, the same thinking. We design everything and keep learning new things while doing it. BMW then benefits from our knowledge and experience just like all the other companies we work with. We call this working approach cross-fertilisation. That is our philosophy – one that generates creative potential and above all the courage to try new things.

In your design products and design concepts you consistently set your sights on sustainability. What if this trend is already over tomorrow?

Absolutely. The material has fantastic properties, even as a recyclate. For example, we already use it in the roof of the i3 as non-woven fibre matting. With growing demand, we will surely soon be seeing new, less expensive technologies for producing it. If you ask me, it's only a matter of time.

Peter Falt in an interview situation.

Such as in the BMW i3, for example?

Peter Falt: Right. It was carbon fibre that made the BMW i3 possible in the first place. In addition, the material is so stable that the car no longer needs a B-pillar. This resulted in a design that would have been inconceivable with any other material. So the material determines the design. Have you seen the key cover for the i3? We developed it out of a sustainable, bio-based plastic. It protects the key from scratches. The trick is that the material is phosphorescent so the key is also easy to find in the dark. That is just a minor invention, but quite an innovative one with real added-value.

Today, a luxury yacht and a ballpoint pen, tomorrow, the interior of a car and a charging station. Is versatility Designworks' recipe for success?

Peter Falt:  We always try to go through the world with our eyes open and to deliberately expose ourselves to a wide variety of influences. Whether it's Coca-Cola, the train or BMW, the same process is always involved, the same thinking. We design everything and keep learning new things at the same time. BMW then benefits from our knowledge and experience just like all the other companies we work with. We call this working approach cross-fertilisation. That is our philosophy – one that generates creative potential and above all the courage to try new things.

In your design products and design concepts you consistently set your sights on sustainability. What if this trend is already over tomorrow?

Peter Falt:  This trend will not reverse. On the contrary, it is still gathering speed. Sustainability is a lifestyle. If I tell someone here at a cocktail party in LA that it's been two years since I filled up my tank, and that I now pay a cent per mile, that's cool. This trend will continue to evolve exponentially. With the i3, BMW has set the bar high and at the same time created a completely new point of departure. Other companies will follow suit and also offer alternatives to conventional car models. That will happen in no time at all. Customers want products like that because they're trendy, chic and better, and the industry wants them because they save costs. This is a process that might, at the most, be slowed down somewhat by a few less sustainable enterprises. But no one can stop it.

 

 

Update: December 2014

Steffen Aumann in an interview situation.

Interview.

The main thing is that the material has a second life.

Steffen Aumann

Head of the BMW Recycling and Disassembly Center.

Recycling end-of-life vehicles is quite an exciting undertaking. Airbags explode as powerful forces and sophisticated mechanisms go to work on the car. All with one goal in mind: to separate out the materials so they can become part of a resource-saving cycle. An interview with Steffen Aumann, head of Environmental Management and Recycling, on passionate customers, the carbon-fibre “adventure” and why it makes sense to think ahead about disposal during the planning stage for new vehicles.

"The main thing is that the material has a second life."

Recycling end-of-life vehicles is quite an exciting undertaking. Airbags explode as powerful forces and sophisticated mechanisms go to work on the car. All with one goal in mind: to separate out the materials so they can become part of a resource-saving cycle. An interview with Steffen Aumann, Head of Environmental Management and Recycling, on passionate customers, the adventure of carbon and why it makes sense during the planning stage of new vehicles to think ahead about their disposal.


The BMW Group’s Recycling and Dismantling Centre (RDZ) is located in northern Munich – in an industrial area far from the city centre. In this somewhat inhospitable location, the Bavarian carmaker must be offering its fans something special, because in 2014 alone more than 1,800 visitors made their way to the austere facility to find out more about resource-friendly and efficient recycling of BMWs both old and new. That’s right: the RDZ not only recycles end-of-life BMW cars, but is also at work investigating recycling methods for the vehicles of tomorrow. Stacked neatly and compactly on storage racks in the yard are pre-test vehicles, prototypes and demonstration cars that spent their lives on test tracks and benches. Among them are the latest SAVs, the complete M series, various MINIs and several i3 and i8 models. No fewer than 30 vehicles are delivered here every day to join the 6,200 vehicles in total that are dismantled and recycled at the RDZ each year.  

Mr. Aumann, we hear that there are customers who drive their old BMW the 800 kilometres or so from Hamburg to Munich just to have it scrapped here at the RDZ. Why would anyone do that?

Steffen Aumann: That actually happens more often than you might think. Of course it would be easier to hand over the vehicle to a BMW recycling partner nearby. But I can understand their motivation. Many of our customers are BMW fans through and through and want to dispose of their vehicle directly at the source. With older vehicles, this is of course a kind of final farewell. Recently, we even had an old BMW 3 Series from South Africa here, which three young adventurers drove up from Cape Town to Munich. The car was 24 years old and already had 400,000 kilometres on the clock when they set off on their journey. There is naturally a very special story behind this: the car’s owner was paralysed in an accident and the car helped him find a reason to go on living. Out of gratitude, he wanted to give us his “Percy” to recycle here. 

Did you then actually throw the car into the compactor?

No, we didn’t have the heart to do that to the owner and the three young men who drove the car all the way here. We showed them what we do with old cars. But the sight of Percy pressed into a cube would probably have been too much for the four to bear. We found the story so compelling that we ended up putting the car in the BMW Museum. It is now a nice little attraction there.  

But you can’t do that with every vehicle, otherwise the museum would soon be full.

That wouldn’t be sustainable in the long term, no. Fortunately, most of our visitors come here out of sheer curiosity. Last week, for example, an American visited us on the way to pick up his new M 5 just to see what would happen to his car someday.

End-of-life vehicles are on average 17 years old.

Were you able to show him already? It might be 20 years before a new car ends up here.

Well, we have to be able to demonstrate it now. As in all other EU member states, we are committed to the current 95 per cent recycling and recovery rate. This also applies to new vehicles, for which we are already investigating resource-saving and efficient dismantling and recycling methods.

Particularly when it comes to the high-quality new vehicles standing around here in the yard, one can’t help wonder why you don’t simply recycle the individual components directly?

Of course we first dismantle the materials and parts in demand on the market – such as radios, navigation systems, wheel rims or front and rear lamps – and sell them wholesale. What we definitely don’t do is feed the parts back into production. They are used and therefore won’t be built into any new cars! Our focus is not on the individual parts anyway, but on the materials. This is mainly because end-of-life vehicles are on average 17 years old. There is hardly any market for their parts anymore because that was a completely different vehicle generation. Materials don’t change as quickly, though. They can still be readily used years later as secondary raw materials or so-called recyclates.    

And they are then incorporated into the next vehicles?

That’s what we try to do. After all, it makes no sense to produce recyclates if there is no use for them. Therefore, we use 20 per cent secondary raw materials for the BMW i3 today and want to increase this percentage even further in the new models. In the end, though, it’s not that important whether the material ends up in a vehicle. The main thing is that the material has a second life. A fender may have been a heating pipe in a previous life and then one day become a beverage can – that’s fine.    

Each airbag opens at the touch of a button.

What happens exactly before you turn the vehicle into a "scrap cube"?

Legal regulations require that the vehicle must be free of liquids. So we first have to remove and dispose of all consumables such as oils and fuels as well as pollutants from batteries or mercury from Xenon headlights, for example. And pyrotechnical components must be neutralised. These are small capsules that contain a highly potent propellant and serve to ensure that the airbags, seatbelt pretensioners and active headrests respond within milliseconds. 

Steffen Aumann sitting at a table, talking.

To reach these pyrotechnical components, you have developed a simple but fascinating technique: You just trigger the airbags in the vehicle. With about ten airbags per vehicle, this is an impressive spectacle.

The process is actually so easy that anyone could theoretically do it. For the pyrotechnical components, we have developed a small dashboard that is connected via an adapter to the vehicle’s wiring harness. At the touch of a button, each airbag opens. This has become even easier with the latest vehicle generation, as we can trigger the system if pyrotechnical units via the OBD interface.    

Equally simple yet impressive is the excavator that dismantles a BMW X5 with brute force and rips out its wiring in just a few minutes.

Yes, we are very proud of this 16-tonne powerhouse we’ve developed. The excavator is extremely fast and effective. If you tried to remove the wiring harness manually it would take hours. In the compactor the fine copper strands stick to the steel of the auto body and can only be filtered out of the shredder with great difficulty. So we remove the wiring first and then all we have to do is separate the copper from the insulation material. Once it is finely shredded, it is easy to recycle and use the valuable material, for example by integrating it into new BMW vehicles.

We have 3,000 external dismantling facilities across Europe.

But you don't develop technologies like these just to impress your visitors, right? What happens with them?

We have our ideas patented and then make them available to our 3,000 external recycling partners across Europe.

What kind of operations are you talking about?

The BMW Group established an extensive network for returning and recycling vehicles back in the Nineties – long before it was legally required. Today, we are represented all over Europe by the 3,000 external dismantling facilities I referred to. This means that our customers can find recycling operations in their vicinity where they can bring their old vehicles free of charge – whether in Romania, Bulgaria, Hungary, Denmark, the UK or Sweden.

Why do you bother developing ideas for external companies?

Every dismantling operation can decide for itself whether it wants to spend four hours removing the pyrotechnical components or whether to buy our device, which does the same job in just a few minutes. We develop technologies to ensure the long-term profitability of these companies. This lets us create a range of offerings for our customers.

But doesn't the manufacturer bear the costs for recycling end-of-life vehicles?

Correct, the directive that applies to all EU member states stipulates that the manufacturer must take back vehicles free of charge. But if the residual value of a vehicle is positive, there are no costs involved. So our dismantlers make a living from what they are able to recover from the vehicles.

The 95 per cent recycling quota applies to all dismantling plants.

Steffen Aumann leaning against a BMW car.

How can you ensure the same recycling standards Europe-wide if each facility decides for itself how to dismantle and recycle the old vehicles?

First of all, every operation is subject to same legal requirements. For the dismantling plants – regardless of whether they are in Bulgaria or the UK – the 95-per-cent recycling quota applies as well as the strict requirements associated with it. We also choose our dismantlers carefully. Each operation has a BMW logo displayed in the entrance, which represents a certain promise to the customers.

But the dismantling facility in Romania surely doesn’t have only BMWs in its yard. How do recyclers know what to do with the different makes of car?

They can find out from the so-called IDIS system – the International Dismantling Information System. This is a software programme that every carmaker feeds with the relevant information about its vehicles. Apart from that, we here at the RDZ are always available to answer questions and also offer training courses.

With the BMW i3, we were involved in the planning phase.

With its entry into electromobility, the company has created completely new challenges for you and your colleagues. Are you already able today to dispose of the BMW i3 in an environmentally-friendly manner?

When the BMW i3 was in planning, we worked closely with the engineers. So we know exactly what's in store for us and were able to clear up most of our questions in advance. Of course, the i3 is to a large extent uncharted territory for us. This starts with the fact that BMW has used more natural fibres, natural products and recycled plastics than in any other vehicle before it.

And what about the high-voltage batteries?

The i3 is an extremely safe vehicle and our recyclers have no trouble dismantling the 400-volt battery. However, there are only a few high-voltage battery recyclers today who have the technology to deal with lithium batteries. We will have to build a solid network for this over the next few years. We are also looking into solutions for reusing old batteries from electric cars. There is still plenty of room for exciting new technologies.

BMW relies on carbon for the body of the i3. The industrial production of the fibre material is still very complicated and expensive. Does carbon really have a future in the automotive industry?

Absolutely. The material has fantastic properties, even as a recyclate. For example, we already use it in the roof of the i3 as non-woven fibre matting. With growing demand, we will surely soon be seeing new, less expensive technologies for producing it. If you ask me, it's only a matter of time.

 

 

Update: December 2014

Cleveland Beaufort sitting at a table, talking.

Interview.

We’re not idealists.

Cleveland Beaufort

Energy Manager at BMW Group Plant Spartanburg.

When BMW Plant Spartanburg's Cleveland Beaufort sources alternative energy to supply his facility with heat and electricity, the numbers have to add up. That much is clear. But the bottom line is not the only thing that makes the plant a sustainable success story: Beaufort is an energy manager who doesn't wait for finished solutions – he is always on the lookout for environmentally-friendly alternatives.

"We’re not idealists."

When BMW Plant Spartanburg's Cleveland Beaufort sources alternative energy to supply his facility with heat and electricity, the numbers have to add up. That much is clear. But the bottom line is not the only thing that makes the plant a green success story: Beaufort is an energy manager who doesn't wait for finished solutions – he is always on the lookout for environmentally-friendly alternatives. 

Spartanburg lies at the heart of the state of South Carolina – a small city with a population of just over 37,000, two airports, a university and a shopping mall: perfectly normal and unremarkable, if it weren't for the unique BMW plant located west of the city. This is where the Bavarian automaker produces all its successful X Series models. The plant is one of the BMW Group's most sustainable facilities – despite a steady increase in production since the early 90s, with more than 300,000 BMW X3, X4, X5 and X6 rolling off the assembly line here in 2014 alone. The X family is not just popular in the United States. 70 per cent of the vehicles built here are exported to more than 140 countries worldwide – making the Spartanburg plant the largest automobile exporter in the US. The location has also become a showcase project for sustainability due to a large extent to the plant's own landfill – which is extremely valuable from an environmental perspective. But the landfill was just the beginning: Today, hydrogen-powered forklift trucks are also used in auto production. But the plant's energy manager, Cleveland Beaufort, isn't finished yet: His goal is to obtain all electricity and heat needed for automobile production in Spartanburg from natural resources.

The Spartanburg plant has become one of the BMW Group's showcase facilities for sustainability. How did that happen?

Cleveland Beaufort: The factory was still relatively new when someone came and told us about a nearby landfill that produced waste gases. Of course, this was completely new territory for us, so "we respectfully declined." At that point, we already knew we wanted to use natural gas, not waste gas. In truth, we had no idea how to use landfill gas. But we learned more about it and finally agreed to the proposal – although we still weren't prepared to invest a single cent.

Doesn't sound like you were convinced...

We had already invested millions in a combined heat and power system four years earlier when we built the plant. Plus, the landfill was almost 15 kilometres away, so we would need a pipeline to deliver the methane generated from waste decomposition.

How did you resolve that?

We got lucky: The energy supplier Ameresco agreed to build and run the pipeline for us. In return, BMW promised to use all energy generated by the landfill for a period of 20 years. Back then, natural energy was much cheaper than it is today. In the beginning, we only had to invest a relatively small amount in the project – between 200,000 and 300,000 US dollars – and we recovered that within just two weeks of operation. We knew right away it was a great deal!

And you had tapped into a previously unused source of energy...

... that also benefitted the environment. We have been using methane gas since 2002 now and it still supplies 50 per cent of our total energy needs for electricity and hot water. As well as saving us five million dollars a year in energy costs, it also reduces our annual carbon dioxide emissions by 92,000 tons – which is roughly the energy consumption of 15,000 American households.

When you're searching for resource-efficient alternatives, it's worth looking at unconventional ideas.

Cleveland Beaufort in an interview situation.

This success story must have required some pioneering work from you and your co-workers in Spartanburg?

Using a landfill to generate energy was certainly an unconventional idea. But it brought us a lot closer to our goal of running our entire production exclusively on renewable energies. We learned that taking new and different paths works. So we now use a wide range of different measures to save energy and increase the percentage of renewables used in production.

That sounds promising. The BMW Group will invest a billion US dollars in the site by 2016 to increase capacity by another 50 per cent. Does that mean you'll need an even higher output of renewable energies?

We will meet that challenge together within the BMW Group. The company has proved on many occasions in the past that sustainability and business success are not mutually exclusive. As the Spartanburg plant has grown in recent years, we have continued to optimise the landfill: In 2008, in fact, we invested another 12 million dollars to expand capacity and boost efficiency. Unfortunately, we won't be able to go any farther down this route, because the quantity of waste we are allocated by the landfill is fixed.

400 solar cells power BMW Museum and three charging stations.

So there is nothing more you can get out of that. What about a new landfill?

That's not likely: Too much resistance among the general population. It's the nimby effect: Not in my backyard. People just don't want waste at the back of their house. Fortunately, we will be able to use the old landfill for another ten years. But, of course, we are already looking at new sources of energy and thinking in all possible directions – for instance, there are two wastewater works belonging to us that could definitely be a source of renewable energy.

What about solar energy and wind power?

We're working on it. In 2012, we installed 400 solar cells, which now supply our 24,000-square-foot Museum, as well as three charging stations for electric vehicles. But think about how many solar cells we'd need for the whole plant! We're not idealists – it just wouldn't be worth our while. Solar and wind energy are still very expensive in South Carolina and subject to strict regulations. Other states, like California, are much farther than we are – when it comes to tax breaks, too. Solar and wind energy will probably only become attractive for us in South Carolina in five years or so.

Emission-free forklift trucks – unthinkable just a few years ago.

Energy facility at BMW Group Plant Spartanburg.

Methane factory in Spartanburg

So you believe time is on your side?

It is! Just look at all the technical innovations we've made here in Spartanburg in the last few years. Even our forklift fleet contributes to sustainable production now. Our 500 or so vehicles no longer use batteries: They run on hydrogen and move around our 350,000-square-metre production facility with no emissions at all. We have replaced the site's battery-charging stations with a hydrogen storage system. This has significantly reduced the plant's power consumption and means we no longer need to dispose of leaded and acidic batteries.

That would have been unthinkable just a few years ago...

That's exactly what I mean. Technical possibilities are developing fast. Our forklift trucks are now being used at the BMW production site in Leipzig as well. We talk and share ideas – worldwide – so that we can meet the company's goal of 100 per cent renewable electricity over the long term: We are working on that together right now. We'll see: Perhaps one day, Spartanburg will use more solar and wind power, or biomass or other natural sources, such as methane gas from cows.

So, you'd consider using organic cows if there were a strong business case?

(laughing) Our core business is to develop and build cars – that is not going to change any time soon. An external provider would have to take care of the cows – like they do with the landfill. But demand for renewable energy has increased significantly, so I'm not worried. One day, we might actually find someone to do that here in South Carolina.

100 per cent of production waste becomes waste for recycling.

Cleveland Beaufort in an interview situation.

Which production processes actually use the most energy?

Definitely the paint shop: That is why, back in 2006, we switched our painting processes to recycled methane gas and combined the steps for base and top coats. This reduced energy consumption by 30 per cent. We haven't used water since we closed our water cycles and introduced waterless processes with dry separation.

Spartanburg is not California and environmental protection is relatively new to the people of South Carolina. Aren't your green ideas a bit much for your associates?

We explain what we are doing here to our associates and they are fully aware what we can achieve with our landfill and hydrogen storage container. Did you notice the recycling bins dotted around the halls? That was part of our goal to completely recycle all production waste from assembly by 2012. And we did it! Nothing goes to the landfill anymore – and that is something our associates are extremely proud of, because they all pulled together to achieve it. You can imagine how difficult it can be in a plant like this that uses so many different materials! Our environmental team did a really great job. We held team competitions and much more. There's even a BMW recycling muppet show!

Sounds like there's a strong team spirit...

Absolutely. Our associates are undergoing a cultural change I've seen in myself. I used to throw everything in the trash. Not anymore. Now, I sort glass, paper and plastic, with a separate container for each. I know a lot of our associates feel the same way. We provide containers for private recycling in the parking garages. Things get especially busy around Christmas. I believe the team has really understood that recycling is not a one-man show – and that it's worth making daring changes.

 

 

Update: December 2014